3 Learning Goals Describe the stages of moral and ethical developmentLearning GoalsDescribe the stages of moral and ethical developmentExplain and apply the core concepts used by individuals and organizations to make ethical decisionsDescribe some ethics-based initiatives for fostering diversity in organizationsExplain the nature of stakeholder responsibility and its ethical basisChapter 2: PowerPoint 2.1

7 Moral IntelligenceThe mental capacity to determine how universal human principles that cut across the globe should be applied to personal values, goals, and actions. The moral principles in moral intelligence include:Integrity: acting consistently with principles, values, and belief, telling the truth; standing up for what is right; and keeping promisesResponsibility: taking responsibility for personal choices; admitting mistakes and failures; embracing responsibility for several othersCompassion: actively caring about othersForgiveness: letting go of one’s own mistakes; and letting go of others’ mistakesChapter 2: PowerPoint 2.5

11 Ethical Intensity FactorsEthical Intensity FactorsMagnitude of Consequences: the harm or benefits accruing to individuals affected by a decision or behaviorProbability of Effect: the likelihood that if a decision is implemented it will lead to the harm or benefit predictedSocial Consensus: the amount of public agreement that a proposed decision is bad or goodcontinuedChapter 2: PowerPoint 2.9

12 Ethical Intensity Factors (continued)Ethical Intensity Factors (continued)Temporal Immediacy: the length of time that elapses between making a decision and when the consequences of that decision are knownProximity: the sense of closeness (social, cultural, psychological, or physical) that the decision maker has for victims or beneficiaries of the decisionConcentration of effect: the inverse function of the number of people affected by a decisionChapter 2: PowerPoint 2.10

13 Self-Serving PrinciplesSelf-Serving PrinciplesHedonist principle: Do whatever is in your own self- interestMight-equals-right principle: Do whatever you are powerful enough to impose on others without respect to socially acceptable behaviorsOrganization interests principle: Act on the basis of what is good for the organizationChapter 2: PowerPoint 2.11

14 Balancing Interests PrinciplesBalancing Interests PrinciplesMeans-end principle: Act on the basis of whether some overall good justifies any moral transgressionUtilitarian principle: Act on the basis of whether the harm from a decision is outweighed by the good in it— that is, the greatest good for the greatest numberProfessional standards principle: Act on the basis of whether the decision can be explained before a group of your peersChapter 2: PowerPoint 2.12

15 Concern for Others PrinciplesConcern for Others PrinciplesDisclosure principle: Act on the basis of how the general public would likely respond to the disclosure of the rationale and facts related to the decisionDistributive justice principle: Act on the basis of treating an individual or group equitably rather than on arbitrarily defined characteristics (e.g., gender, race, age)Golden rule principle: Act on the basis of placing yourself in the position of someone affected by the decision and try to determine how that person would feelChapter 2: PowerPoint 2.13

16 Ethics InsightOur system of capitalism is built on investor trust— trust that corporate leaders and boards of directors will be good stewards of their investments and provide investors with a fair return. There is no doubt that some leaders of corporations have violated that trust.William George, Former Chairman and CEO, Medtronic, and Author, True North: Discover Your Authentic LeadershipChapter 2: PowerPoint 2.14

17 Ethics Insights for LeadersEthics Insights for LeadersLeaders must commit to and model ethical behaviors and decisionsDevelop a code of ethics and follow itHave procedures for organization members to report unethical behavior, such as whistle-blowing policycontinuedChapter 2: PowerPoint 2.15

19 Benefits and Costs in Ethical Decision MakingBenefits and Costs in Ethical Decision MakingBenefits—whatever a party considers desirableCosts—whatever a party considers undesirableRequires a determination of the interests and values of those affected by the decision(s)One party’s benefits in a decision may create or be perceived to create costs for one or more other partiesConflicting assessments can lead to different interpretations of ethical responsibilitiesChapter 2: PowerPoint 2.17

21 Procedural and Interactional JusticeProcedural and Interactional JusticeProcedural justice: the perceived fairness of the rules, guidelines, and processes for making decisionsInteractional Justice: the quality of interpersonal treatment individuals receive during the use of organizational proceduresChapter 2: PowerPoint 2.19

22 Performance Reviews: Procedural and Interactional JusticeManagers should be given specific and clear instructions on proceduresManagers should be trained in how to administer the reviewResults should be discussed with employeesEmployee participation should be allowed in the review process (e.g., setting goals, providing input on performance)The review should be developmental (e.g., indicate how to improve)Chapter 2: PowerPoint 2.20

23 Change Competency: James McNerney, CEO of BoeingChange Competency: James McNerney, CEO of BoeingLearning InsightsCritical to adhere to highest ethical standards from the top-downMany changes made to advance ethics and complianceCultural change was vital to creating an ethical environmentChapter 2: PowerPoint 2.21

24 Insights: Diversity and Ethical CulturesInsights: Diversity and Ethical CulturesPeople with different perspectives and approaches need to be valuedRecognize both the learning opportunities and the challenges of a culturally diverse workforceCreate an expectation of high standards of performance and ethics from everyoneStimulate personal development and support openness to ideasMake workers feel valuedChapter 2: PowerPoint 2.22

25 Generation Diversity and EthicsGeneration Diversity and EthicsMature: born from 1925 through 1944Baby boomers: born from 1945 through 1964Generation X: born from 1965 through 1981Generation Y: born from 1982 through 2000Chapter 2: PowerPoint 2.23

26 Ethics-Related Commonalities Among GenerationsAll generations attach importance to family, integrity, achievement, love, and competenceEveryone wants respect; they just define it differentlyTrust mattersLeaders are wanted who are credible and trustworthyOrganizational politics are seen as a common problemNo one really likes change, unless it benefits themChapter 2: PowerPoint 2.24

27 Gen Y and 2008 World of Work Report—Do You Agree?Generation Y respondents think that 22 percent of their Gen Y coworkers as a group are ethicalGeneration X respondents think that 28 percent of Gen Y coworkers as a group are ethicalBaby boomer respondents think that 16 percent of Gen Y coworkers as a group are ethicalIs this due to small numbers bias: The tendency to view a few incidents, cases, or experiences with individuals as representative of a larger populationChapter 2: PowerPoint 2.25

28 HarassmentHarassment: verbal or physical conduct that denigrates or shows hostility or aversion toward an individual because of that person’s race, skin color, religion, gender, national origin, age, or disabilityImpacts of HarassmentCreates an intimidating, hostile, or offensive work environmentUnreasonably interferes with an individual’s work performanceAdversely affects an individual’s employment opportunitiesChapter 2: PowerPoint 2.26

29 Sexual HarassmentSexual harassment: unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual natureQuid pro quo harassment: submission to harassment is used as the basis for employment decisionsHostile work environment: occurs when an employee is subjected to comments of a sexual nature, offensive sexual materials, or unwelcome physical contact as a regular part of the work environmentChapter 2: PowerPoint 2.27

33 Diversity Competency: Verizon’s Workplace DiversityLearning InsightsTop leaders must set tone and expectations for ethical conduct and diversityDiversity means embracing it as part of company culture, viewing it as integral to the business, and rewarding itDevelop diversity strategy with measurable components and feedback indicatorsChapter 2: PowerPoint 2.31

34 Stakeholder Responsibility and EthicsStakeholder Responsibility and EthicsStakeholder responsibility: leaders and other employees have obligations to identifiable groups that are affected by or can affect the achievement of an organization’s goalsStakeholders: individuals or groups that have interests, rights, or ownership in an organization and its activitiesChapter 2: PowerPoint 2.32

37 Ethics Competency: Johnson & Johnson’s Stakeholder Ethics and PrinciplesLearning InsightsFirst responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and servicesResponsible to employees and communitiesResponsible to stockholdersChapter 2: PowerPoint 2.35

38 Sustainable DevelopmentSustainable DevelopmentPattern of resource use that strives to meet current human needs without compromising the ability of future generations to meet their own needsUnited Nations Division for Sustainable Development identifies 96 core indicators of sustainable development within a framework that contains 14 themesChapter 2: PowerPoint 2.36

40 Discussion QuestionsGo to In the search box, type in “corporate governance guidelines.” Open the document titled “Corporate Governance Guidelines at Xerox.” Identify at least two of the specific ethical principles that are reflected in this document. What is a specific provision that illustrates each of the principles identified?Review the Learning from Experience feature on Anne Mulcahy, chairman and former CEO of Xerox, and other discussions of her leadership in this chapter. How would you evaluate her in relation to each of the six attributes of the diversity competency presented in Chapter 1? For each attribute on which Mulcahy is evaluated, identify the specific statement(s) about her that serve as a basis of your assessment.continuedChapter 2: PowerPoint 2.38

41 Discussion Questions (continued)Discussion Questions (continued)Think of an organization in which you have been employed (or are currently employed). What are your assessments of the stage of moral development and moral intelligence of the manager for whom you worked? What specific examples of this manager’s behaviors and decisions serve as the basis for your assessments?What are the similarities and differences between the organization interests principle and the utilitarian principle?What are the similarities and differences between the professional standards principle and the distributive justice principle?continuedChapter 2: PowerPoint 2.39

42 Discussion Questions (continued)Discussion Questions (continued)From your personal perspective, what is your assessment of the ethical intensity of the grading system and practices used by an instructor in a course that you have completed? Your assessment should include an assessment of each of the six components of ethical intensity.What specific aspects of procedural justice are suggested in the Change Competency feature on James McNerney, CEO of Boeing?How would you assess Generation Y individuals as a group with respect to their general pattern of ethical behaviors and decision making within the work environment? Explain. If a generalization is possible, what is your overall assessment? Explain.continuedChapter 2: PowerPoint 2.40

43 Discussion Questions (continued)Discussion Questions (continued)How did (or does) an organization for which you have worked (or do work) compare with the policies, practices, and goals of Verizon’s workplace diversity as presented in the Diversity Competency feature? Give specific comparisons of similarities and/or differences.What specific ethical principles for guiding decisions and actions are illustrated in the Ethics Competency feature titled “Johnson & Johnson’s Stakeholder Ethics and Principles”? You should relate specific statements in the code to specific ethical concepts.Sustainable development is discussed as an application of stakeholder responsibility. Think of an organization for which you have worked (or currently work). In what ways did it implement or fail to implement sustainable development initiatives?Chapter 2: PowerPoint 2.41

46 Case: Diversity Competency—Consensual Relationship AgreementsCritics of CRAs assert that they are too intrusive, ineffective, and unnecessary and that they can cause as many problems as they solve. Identify the specific reasons and examples that might justify these criticisms.How would you assess the ethical intensity of CRAs from the perspective of the employer? From the perspective of the employees in a consensual relationship?continuedChapter 2: PowerPoint 2.44

47 Case: Diversity Competency—Consensual Relationship Agreements (continued)What specific ethical principles might be used to justify the use of CRAs? Explain.What ethical principles might be used by employees in consensual relationships to oppose signing such an agreement? Explain.Do you personally favor or oppose the use of CRAs in the workplace? Explain.Chapter 2: PowerPoint 2.45